To all your points, yes tons and tons of kids play soccer (every young child does, hence the term "soccer mom" for parents of children that play). i agree with steve and the money point. i will add an additional point though.
in addition to the money side, the scouting and development of US players is where the breakdown is. MLS academies are new and untested, before that kids play for a travel team, basically higher level competition than standard children little league. after that they play in high school, and then college and then MLS or abroad. the problem is that until the college/university level all the coaching is mostly fathers who read a "how to coach soccer" book or watch some Real Madrid on the weekends. i know because my father was one! our high school soccer coach was the physical education/gym teacher! we were always in the state championships every year (perennially a best team in the state) and had a lot of talent, but to be honest, our coaches were just coaching to get an extra 10k a year, they didn't truly know what they were doing, and we were top of the class!
so i think the coaching and development need a boost from the us soccer federation, to train coaches to truly understand the game.